What is an acceptable escalation clause for raising rent?

Question from Richard updated on 21st August 2009:

Please advise an acceptable escalation clause that can be used for a long term (3 years) residential lease. For annual increases.

Our expert Jeff Montgomery responded:

To meet the requirements of the Residential Tenancies Act for rent increases, the tenancy agreement should state that the tenancy is subject to an annual rent increase, and should specify the day the increase is to occur. Even with this information provided in the agreement, under the Act the landlord is still required to give the tenant 60 days’ notice in writing of each such increase. You should keep a copy for yourself, and you must allow time for serving the notice on your tenant.

If you hand the letter to your tenant, the notice period will start immediately. However, if you drop it in your tenant’s letterbox you must allow an extra two working days, and if you post it to your tenant you must allow an extra four working days. To discuss your situation further, or for advice and information about annual rent increases, you can contact the Department of Building and Housing on 0800 TENANCY (0800 836 262).

The Department of Building and Housing provides information and guidance on building law and compliance, services including weathertight homes, and advice for tenants and landlords.

 

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